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Following recent ban on Bitcoin and other forms of virtual cryptocurrencies in Vietnam and China in the last quarter of 2017, with the latter being the first to ban Bitcoin in October and Vietnam following suit in November, the South Korean government has also followed suite making South Korean government the latest to try and control the digital currency and making the value of Bitcoin sink globally.
Bitcoin prices slumped dramatically today as the South Korean government announced new regulations to try and halt the wild speculation that is engulfing the cryptocurrency.
The result was a fall in the value of bitcoin from around $16,400 (£12,204) to $13,500 (£10,000) which is normal as a result of the crackdown.
“The government had warned several times that virtual coins cannot play a role as actual currency and could result in high losses due to excessive volatility,” the South Korean government said in a statement, according to Reuters.
“We cannot leave the abnormal situation of speculation any longer.”
South Korea is banning the opening of anonymous cryptocurrency accounts and will introduce legislation that lets regulators close down virtual coin exchanges if necessary.
The government said this was a measure that was recommended by the justice ministry, according to Reuters.
According to the Financial Times, bitcoin has become incredibly popular in South Korea, leading to inflated prices around trading.
“South Korean traders are paying about 30 per cent over international rates for bitcoin, reflecting the popularity of the asset in the country and the difficulty in arbitraging among markets,” the site reported .
Last month, Vietnam introduced a ban on bitcoin and other virtual cryptocurrencies, echoing a similar move made by China in October.
The country’s state bank issued a formal statement prohibiting the use of virtual currencies to pay for goods and services. The punishment for offering and accepting payments in bitcoin can run to over £6,000.
The bank doesn’t expressly say why it is banning the use of bitcoin but rather highlights regular forms of payment: cheques, credit cards, etc as acceptable.
“Bitcoin virtual currency and other similar is not lawful means of payment in Vietnam; The issuance, supply, use of bitcoin and other similar virtual currency as a means of payment is prohibited in Vietnam,” explained the government-run bank.
With larger percentage of South Koreans into Bitcoin or one form of cryptocurrency or the other, this crackdown might further affect the value of Bitcoin.
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